FORD INDIA
INDEX
| NO: | CONTENT | PAGE NO: |
| 1 | INTRODUCTION | |
| 2 | SEGMENTATION | |
| 3 | TARGETING | |
| 4 | POSITIONING | |
5 | Marketing strategies | |
| 6 | Ansoff’s Model | |
| 7 | Point-of-Parity and Point-of-Difference | |
| 8 | Evaluating and selecting the market segment for FORD | |
| 9 | BCG MATRIX | |
| | | |
INTRODUCTION
Ford Motor Company is an American multinational corporation and the world's third largest automaker based on vehicle sales in 2005. Based in Dearborn, Michigan, a suburb of Metro Detroit, the automaker was founded by Henry Ford and incorporated in 1903. Ford now encompasses many global brands, including Lincoln and Mercury of the US, Jaguar, Aston Martin and Land Rover of Great Britain, and Volvo of Sweden. Ford also owns a one-third controlling interest in Mazda.
Ford has also been one of the world's ten largest corporations by revenue and in 1999 ranked as one of the world's most profitable corporations. However, in recent years, it has not fared as well and has not gained market share in North America since 1995.
Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce, especially elaborately engineered manufacturing sequences typified by moving assembly lines. Henry Ford's combination of highly efficient factories, highly paid workers, and low prices revolutionized manufacturing and came to be known around the world as Fordism by 1914.
Ford’s Journey to India
Ford started its innings with the Mahindra-Ford joint venture formed in 1994, which produced the Escort out of M&M Nashik plant. After meeting initial success, sales of the Escort was finally replaced by the Ikon in 1999.
The Ikon marked a new beginning for Ford in India. It rolled out of the Marajmalaingar plant near Chennai and by now, the company had parted ways with M&M and was renamed Ford India Ltd in 1998. The Ikon was the first model by a multinational to be developed specifically for India. Though it was based on the Fiesta, it was a unique body style and was offered and was offered with an option of three engines, including a diesel. The car was a big hit. The Ikon underwent several face-lifts and price cuts to keep demand high. However, fresher competition and a reputation for high-maintenance saw sales gradually decline. After the arrival of the modern and highly-capable Fiesta, another made-for-India car, with state-of-the-art engines, the Ikon has been marginalized. The Fiesta has picked up where the Ikon left and is selling well.
Though the Ikon and Fiesta have been the mainstays of Ford’s production in India, the company has had limited success with other models. The Mondeo, launched in 2001, was a very talented car by was simply not suited to Indian conditions and earned a reputation for being exorbitant to maintain.
The Endeavour SUV was launched in early 2004 and has sold well for its niche. The Endeavour has recently been upgraded in 2007 and this has boosted the appeal of the big SUV. In 2004, Ford launched the Fusion, which has received a lukewarm response though the recent diesel variant has perked up sales.
Presently offering five different models, Ford India Limited (FIL) is catching up fast with the Indian consumer.
SEGMENTATION
Segmentation is the process in which a particular segment of the customers which have same tastes or preferences and are the potential customers are targeted instead of targeting the customers as a whole. Segmentation marketing offers a lot of benefits as compared to mass marketing like a co. can create a fine tuned products for those selected customers, can select the best distribution policies, best communication channels and will have a clear picture of their competitors in the same segment. Therefore segmentation has become a major factor in every company’s marketing policies. Various basis of segmentation can be as follows-
1) Geographic segmentation.
2) Demographic segmentation
3) Psychographic segmentation
4) Behavioral segmentation
5) Strategic segmentation
Ford India has mainly segmented the Indian automobile market on various basis which are the parts of above mentioned factors-
1) Geographical Segmentation:
Segmentation on the basis of Areas/Cities: for e.g. Ford is mainly considering the metro cities or the big cities of India as they are the most potential customer areas for them. Since the metros or the big cities have a very high rate of prospects for the newly established Ford in India. Though Ford cars are present in the small cities also but some of its models such as Endeavour and Mondeo are mainly segmented for the big cities and therefore they are concentrating more on these cities such as Delhi, Noida, Mumbai, Kolkata, Bangalore, Pune etc. Here the customers are much more acceptable towards the Ford as compared to the other small cities it has created a different segment of these cities and trying to concentrate on that. May be later on it will increase its segmented areas.
2) Demographic Segmentation:
Segmentation on the basis of Age: Ford India has segmented this market on the basis of age also like it is segmenting its cars for the youth or middle age segment. Since different age groups have their own preferences and tastes therefore they are needed to be catered in a different way. For e.g.: Ford Fusion is mainly segmented for the youth age.
Segmentation on the basis of Income: Ford India has also segmented the market on the basis of the income level of the customers’ .Like it is segmenting its cars only in the upper middle level or the high level income groups. As it is not producing the cars of small segments therefore it is not needed to concentrate on the lower income group of people as they are not the potential customers for them. E.g.: Ford fusion and Ford Fiesta are mainly segmented for upper middle segment..
3) Psychographic Segmentation:
Segmentation on the basis of the Lifestyle: It means that the segmentation is done on the basis of the attitude, interests etc of the potential customers. As the decision of a customer purchasing a car will be affected by his interests and attitude towards the company or the product, therefore it is one of the main basis of the segmentation. Like a customer will be attracted by the global brand name of the Ford company which will affect its decision of purchase.
4) Behavioral Segmentation:
Segmentation on the basis of Benefits Provided: Ford India has segmented the market on the basis of the benefits provided such as quality, service, economy, speed comfort etc. As Indian Automobile market is highly competitive and Ford has still not established itself properly in India therefore it needs to provide not only these benefits but also some distinctive benefits which will differentiate it from other cars in the same segment.
Segmentation on the basis of the Readiness stage: Ford India is segmenting the market on the basis of the aware customers, unaware customers, informed and interested customers, desirous and intending to buy customers. As there are some potential customers and some non potential customers therefore segmenting them is a useful task for the company .It is mainly a part of the behavioral segmentation.
5) Strategic segmentation of cars:
The Ford in India has launched the car only for few segment of people.
The segmentation of car buyers based on price preferences are
· Family car segment: These cars forms a reasonably sizeable segment of the market (around 15 percent).
Preferred price range is from 5 lakh to 6 lakh.
‘FORD IKON’ AND ‘FORD FUSION’ come under this type of segment.
· Premium car segment: This segment represents buyers who need a real world-class car and are willing to pay the due price.
Preferred price range starts from 8 lakh to 12 lakh.
‘FORD FIESTA’, ‘FORD MONDEO’ comes under this segment of cars.
· SUV segment: The buyers of this segment like to have big vehicles.
And these cars are also useful for sport riding and even on hill areas. There body is designed similar to off road vehicles, which can withstand to Indian roads.
‘FORD ENDEAVOUR’ occupies this segment.
| Segmentation | Demographic | psychographic | Behavioral | Geographic |
| FORD IKON | Middle Class | Outdoor oriented | Benefits-quality, service, economy, speed comfort | Urban And Semi -Urban Areas |
| FORD FUSION | Youth class | sports oriented | Benefits-quality, service, economy, speed comfort | Urban |
| FORD FIESTA | Middle-upper middle class | Fuel efficiency oriented | Benefits-quality, service, economy, speed comfort | Metropolitan tier I, tier II cities |
| FORD MONDEO | Upper Class | Outdoor oriented | Benefits-quality, service, economy, speed comfort | Major Cities(inclusive of tier I, tier II cities) |
| FORD ENDEAVOUR | High Class | Sports oriented | Benefits-quality, service, economy, speed comfort | Major Cities(inclusive of tier I, tier II cities) |
TARGETING OF FORD CARS IN INDIA
Targeting is the process which is performed after the company has done the segmentation of the market on various basis. For targeting, a company has to evaluate various segments and then decide upon to target accordingly. While doing so a company has to look on to the overall attractiveness of the segment and the company’s objectives and resources. Targeting is an important step in the performance of any company because correct targeting helps a company to rightly choose the potential customers.
As far as Ford India is concerned it has not confined itself to target only one segment. Though it has not entered into the small car segment yet it has tried to cover many aspects of the Indian automobile market like it has its Ford Ikon model mainly for the entry level middle class group. It has Ford Fiesta for the upper middle class group which competes with Honda city , Hyundai Accent etc in the same segment and for the higher income group or the premium segment it has its Mondeo and Endeavour in the market. Therefore Ford India has tried to target mainly the upper middle and higher segments of the Indian car market through its various models.
· Ford Ikon is mainly targeted for the middle class entry level group with a attractive price tag. It has tried to focus on people with a drive of running a big car with not much financial burden.
· Ford Fusion Company is targeting mainly the youth class of the society and also presented it as an urban activity vehicle. It was a sort of Mini-SUV in the market.
· Ford Fiesta is mainly targeted for the part of the society which is mainly attracted by the fuel efficiency of the car therefore company has launched the diesel version along with petrol version of Ford Fiesta which provides excellent mileage as compared to other cars in the same segment.
· Ford Mondeo is mainly targeted for the upper class of income group and therefore priced highly. It is mainly launched keeping in mind the upper service class or the big business houses.
· Ford Endeavour was entered into the market as Sports Utility Vehicle (SUV). It was specifically designed for the Asian conditions. It was the biggest SUV to hit the market so far. It mainly targeted the high rich class with a passion of sporty look vehicle.
Therefore Ford India has mainly targeted various segments of the market through different models of cars.
| Models | Targeting |
| Ford Ikon | Entry- level middle income group |
| Ford Fusion | Youth class |
| Ford Fiesta | Upper middle class group |
| Ford Mondeo | Upper service class or big business groups |
| Ford Endeavour | Higher income group or premium segment |
POSITIONING OF FORD CARS IN INDIA
Each firm needs to develop a distinctive positioning for its market offering.
Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the target market’s mind. The end result of positioning is the successful creation of a market-focused value proposition, a cogent reason why the target market should buy the product.
“Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a person. But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect.”
Once the company has developed a clear positioning strategy, it must communicate that positioning effectively through all facets of the marketing mix and every point of contact with customers.
FORD IKON
FORD Ikon was launched in India by Ford India in the year 2001. It was launched in the upper segment for upper middle class and positioned as a mid-size entry level car. While this segment was occupied by esteem and cielo. Ikon was launched in this competitive segment and was positioned as ‘the josh machine’. Ford was already accepted on Indian roads through escorts. Ikon was launched at a competitive price and was positioned as a car incredibly best entry midsize car reachable for a buyer entering into midsize car segment.
Tagline: Leave the small world behind. The bigger, better josh machine, now at the EMI of a small car.
Customer could buy a big car paying the EMI of a small car. This was to ease the customer in terms of payment by providing easy finance.
Ford Ikon Flair
Ford launched the modified version of Ikon with the name Ford Ikon Flair in 2006. Flair reflects the penchant for performance and style that drives every young achiever. With new sporty features, competitive pricing and attractive options like Extended Warranty and Total Maintenance Plan, the young Ikon is the perfect ally for every young icon. Identifying the change in Indian consumer buying behavior Ford targeted the youth and attached attitude to Flair. As Ikon had been successful and common on Indian roads, ford modified it and gave it a more young and sporty look. Ford positioning of Flair was a reflection of change and innovation by the company.
Tagline: Live life with josh Headline: Inside every young ikon, there's a young icon.
FORD FIESTA
To heat up the mid-size sedan segment Ford launched Fiesta pricing it aggressively against the rival’s car the Hyundai Accent and Honda City. The company is positioning it as a young successful, reliable car with the new technology. Fiesta makes a bold, strong, side view statement that enhances its sense of purpose and powerful appearance. The company also focused on styling and spacious interiors providing it a young and elegant look.
Headline1: Fuel efficient. Fun to drive. Refined. Drive it to believe it.
Tagline: Go Fida
FORD MONDEO
After the success of Ikon Ford went into a upward line extension .Ford launched Mondeo in December 2004 in the premium segment to create and tap a niche market in India. Mr. David E. Friedman, Managing Director and President, Ford India Ltd, told Business Line ‘the Mondeo was a niche vehicle and it was a conscious decision not to chase volumes. "We continue to sell the Mondeo for those who are looking for driving excellence and who want a unique car that really offers them that experience." Ford priced it aggressively to position it as a luxury car and priced it to compete with sonata and Camry.
Initially Mondeo had tough time in the market then Ford introduced the upgraded version of mondeo with add on features .The car's exterior and interiors was freshened up, but the driving characteristics remained the same. Ford Mondeo has been positioned as an exceptional driver’s
Then Ford reduced the price of Mondeo in March 2005 to 14.21 lakh and advertised it heavily in metro and urban cities and positioned it as ‘refined aggression’ and differentiated it in the market.
Headline1: "It has real presence." It bites
Headline2: Luxury. The restless version
Tagline: refined aggression
FORD ENDEAVOUR
Ford India entered into the sports utility vehicle (SUV) segment with the unveiling of Ford Endeavour. It was positioned as ‘Toughie’ on Indian roads as a majestic SUV.It provided respect and luxury to the owner. Endeavour is developed for Indian roads with high ground clearance. It is full of excitement and a complete luxury car.
Baseline: Make every day exciting
FORD FUSION
Ford launched Fusion, which blends a sedan with a sports utility vehicle. Fusion was a make-up of an MPV and the stance of a mini-SUV. It was positioned as a “Urban Activity Vehicle”. Fusion created a new segment in itself through a crossover between a sedan and SUV, and it was advertised to be an ideal foil for the urban busy commuter; ‘: I'm a Delhi-ite’. A sense of attitude and difference is attached to Fusion.
Headline1: I'm a Delhi-ite
Headline2: Some cars have great ads. This ad has a great car.
Baseline: As different as you.
Marketing strategies of FORD:
The factors responsible for the growth of Ford India can be attributed to the various marketing strategies undertaken by Ford India. The various marketing strategies undertaken by Ford India are as follows:
Product differentiation based on efficiency:
FORD EXCELLING THROUGH SERVICE: Ford tries to differentiate its offer on the plank of service. It has gone in for a new norm in customer service: “fix it right-the first time-on time”. Ford is also supplying videotapes showing how repairs have to be done.
Adopting Offer to Suit Target Segment:
Ford modifies its models for
Ford modified its models for the Indian target segments as shown below:
Ø Higher ground clearance to make the car more compatible to the rougher road surface in India.
Ø Stiffer rear springs to enable negotiating the ubiquitous patholes on Indian roads.
Ø Changes in cooling requirement, with greater airflow to the rear.
Ø Higher resistance to dust.
Ø Compatibility of engine with the quality of fuel available in India.
Ø Location of horn buttons on the steering vehicles. (As the India motorist uses the horn more frequently, for cars sold in India, the horn buttons are kept on the steering wheel and not on a lever on the side as in the models sold in Europe.)
Strategic Promotions by FORD:
Ford follows the promotions at two levels, they a
1) Promotions of product directly by the manufacturer.
2) Promotions at dealer level.
In the first step the products of vehicles manufactured by the Ford Automotives are directly promoted by the manufacturer by himself. He follows many promotional strategies like
1. Advertising through television and newspaper.
2. Internet or interactive marketing.
3. Direct marketing.
In the second step the dealer of the vehicles promotes the vehicles.
The various promotional strategies followed by the Fortune Ford at dealer are
1. Advertising though news papers, radios, palm plates. In this all the features of the product and its prices are given in detail to the customer.
2. In televisions the scrolling are given about the product and its features.
Hoardings:
A heavy picture of the product which comprises of its attributes and special features are displayed on the roadsides in the form of hoardings. It is a bit expensive strategy but attracts many people who pass by that roadside.
This type of advertisement is prepared for those segments of people who cannot afford their time in reading newspapers and watching televisions. While travelling from their home to office, moving on their business activities they may watch these hoardings. These hoarding are especially setup at the road signal stops.
Maintaining Data Bank:
In this the dealer collects personal/bio-data (address and contact number) of many people from various organizations and different sector who are ready to buy the vehicles and who change the vehicles regularly.
These people are met-in person or contacted through their contact number. The various new features and new offers regarding the vehicles are advocated to them and are given discounts on group purchase of vehicles, i.e. if 5 or more friends in the group purchase the cars at a time then they are given special discounts on the vehicles.
Free Insurance:
The Fortune Ford gives a special offer of free insurance on the purchase of each vehicle to its new customers.
Relationship Marketing:
Fortune Ford pays a special attention towards its old customers. To retain the old and existing customers it conducts a corporate meet at a luxurious hotel. The event aims at knowing the problems of the customers regarding the vehicles and also service feedback.
In this way it maintains an effective relationship with the customers and gains the reputation and goodwill in the minds of the customers.
Sales Promotion:
The sales promotion is done in the fortune ford at three levels:
1. Showroom sales: In this the customers walk in to the showrooms to know about the details of the product. Specially trained sales executives who are present in the showrooms give a detailed explanation about the product to the customers.
Sales executives give a detailed note on the products features, various offers
given by the manufacturer and also by the dealer to the customer and enhances
the sales of the vehicles.
2. Corporate sales: A special team of sales executives are sent to some big corporate sectors and there they personally meet the heads of the organizations like C.E.O’s, Managers etc., and explain about the vehicles and the offers and special schemes provided by the dealer to them on bulk purchase of the vehicles and try to promote the sales of the vehicles.
3. Field sales: The sales executives conduct some events with the corporate working people and try to demonstrate the product features and its benefits and try to promote the product and increase its sales.
Conducting Customer Delight Program:
This is a unique program conducted by the Fortune Ford. This is a program conducted to retain the old customers of the Ford. The old customers of the Fortune Ford are meet personally and they are requested to give their feedback by filling in the questionnaire which is specially prepared for them. In this questionnaire their problems regarding the vehicle and also their post sale service experience are taken. If there exists any problem, then the Fortune Ford service men try to resolve the problems of their customers as soon as possible and makes the customer satisfied.
This is a technique to attract the new customers by satisfying the old customers and gaining goodwill in the market.
STRATEGIC SALES STANDARDS:
Fortune Ford maintains strategic sales standards in the following manner.
· The Sales faculty is clean, tidy and inviting, making customers comfortable while purchasing products and availing services.
· Customers are courteously acknowledged within two minutes of their arrival and are advised that a Sales Consultant will be available upon request.
· The Sales Consultant’s appearance and dress will be of the highest standards.
· An advisory relationship is established between the customer and the Sales Consultant who listens to the customer, identifies their needs and ensures that they are met.
· A pleasant, non-pressured purchase experience will be provided during which a thorough demonstration of the vehicle features and benefits will be made.
· A test drive will be offered to all customers.
· Using a check list, the Sales Consultant delivers the vehicle in perfect condition when promised.
· Customers will be contacted within one week after delivery to ensure total satisfaction.
Applying Ansoff’s Model for FORD
The ansoff matrix is based on the strategies adopted by ford in the year 08-09.
1. Market Penetration
Due to economic downturn Ford India did not undertake any market penetration strategy in their last quarter.It increase the prices of their cars the latest one being the price of Ford Ikon increasing by 1.5% from April 2009.
Ford India believes in delivering premium quality products to its customers and they mostly target the upper middle class, who won’t mind the price hike if they get good quality.
Their main strategy involves Maintaining or increasing their share of current products through promotions and providing quality product and also by introducing loyalty schemes to its customers.
2. Market Development
Ford’s market development strategy lies in increasing its market share through expanding their dealer and service networks in major metropolitan cities inclusive of Tier II & III cities. Another strategy included Limited editions being provided more at the same costs. Ford also relaunched its Ford fiesta ZXI. The new ford fiesta especially targeted the young generation who were suave and style-oriented professionals unlike Fiesta which targeted the economical class .The main attraction for this new vehicle was that it is surrounded its occupants with eye-catching luxury and comfort and sumptuous interiors which included stylish leather interiors in order to catch up with the youngsters trend in mind.Ford also expanded its market through increasing local content in its vehicle i.e. Outsourcing aluminum cylinder blocks from Pune instead of Europe. Local content in Ford Fiesta & Ikon are 85% & 90% resp.
3. Product Development
After introducing IKON in the sedan segment they haven’t introduced any new product in the existing market. FORD INDIA with their strategy of creating new variants of their existing products has been able to maintain their market share that they had.
4. Diversifications
Ford follows a vertical diversification strategy by setting up integrated and flexible engine manufacturing plant in India. They also increased their current capacity of 60K units per annum to 2.5 Lakhs.As a part of Concentric Diversification they are planning to launch new crossover cars in the long term in India. The latest one being FORD FIGO.Whose target market are rumored to be the small family and the young professionals. The launch of FORD FIGO is expected to be around March 2010.
The main Point-of-Parity and Point-of-Difference which ford has with its competitors….
· Ford Ikon has environment friendly air-conditioning system but it differentiates by being the only car in this segment having a dedicated AC vent for its rear seat passengers.
· Ford Endeavour uses soft leather seats for its vehicle .The main point of differentiation is that Ford uses high quality cougar leather.
· Ford Mondeo uses Kenwood cd players where as its competitors use CD players like jvc.Kenwood cd players have 5CD changer, high quality DTS system.
· Ford Endeavour has tubeless tyres where as its competitor Pajero uses tube type tyres.Tube less tyres increases the sustainability of the life of the tyre .
· Ford Fiesta when compared to Chevrolet Aveo has 4 speakers while Aveo has got only two.
· Ford Fusion has a ground clearance of 198 mm which is excellent to say the least. For comparison, Baleno and Esteem all have a ground clearance of 170 mm .This is extremely beneficial while driving on Indian roads in order to avoid abrasion.
· Ford Mondeo uses Xenon lamps inside the clear lamp covers in their vehicles these lights are much more powerful and look good too.
Evaluating and selecting the market segment for FORD.
Inorder to evaluate different market segments the firm must look in to the segments overall attractiveness the company’s objectives and recourses. After evaluating different segments the company considers the following pattern of target selection.
The pattern selection for Ford is as follows…
Single Segment concentration
M1 M2 M3
| | | |
| | | |
| | | |
P1
P2
P3
M1=middle class,M2=upper middle class,m3=higher income group
P1=Ford Fiesta,P2= Ford Mondeo ,P3=Ford Ikon
Ford concentrates Ford Mondeo in this category. Ford Mondeo is mainly targeted towards the big corporate and the upper middle class. Through this sort of concentrated market Ford gains a strong knowledge of the segments needs and achieves a strong market presence. In this segment Ford enjoys operating economies through specializing its production, distribution and promotion. Ford expects to earn a high return on its investment through capitalizing on this segment.
Selective Specialization
M1 M2 M3
| | | |
| | | |
| | | |
P1
P2
P3
M1=middle class,M2=upper middle class,m3=higher income group
P1=Ford Fusion,P2= Ford Fiesta ,P3=Ford Endeavour
Ford selects a number of segments each objectively appropriate and attractive. Each of these segments promises to be a money maker. Ford segments Ford Fusion towards the middle class. Ford Fiesta mainly concentrates on middle-upper middle class. Ford Endeavour is mainly concentrated towards High Class group.
Product Specialization
M1 M2 M3
| | | |
| | | |
| | | |
P1
P2
P3
M1=middle class,M2=upper middle class,m3=higher income group
P1=Ford Fusion,P2= Ford Ikon ,P3=Ford Endeavour
Ford manufactures Ford Ikon inorder to cater to different market segments which includes middle-upper middle class.
Market Specialization
M1 M2 M3
| | | |
| | | |
| | | |
P1
P2
P3
M1=middle class,M2=upper middle class,m3=higher income group
P1=Ford Fusion,P2= Ford Ikon ,P3=Ford Fiesta
Ford Fusion, Ikon and Fiesta through market specialization concentrate on serving the needs of the middle class. Through this market specialization Ford gains a strong reputation in serving this customer group and thus it becomes a channel for additional products the customer group can use. For eg. Ford introduced the Ford Ikon Flair for the same target group.
BCG MATRIX of FORD INDIA
M A R K E T S H A R E
| STARS ENDEAVOUR | QUESTION MARKS FIESTA |
| CASH COWS IKON | DOGS FUSION |
G High Low
R
O
W
T High
H
R
A Low
T
E
We can place the Ford- India products in the BCG matrix as shown above. Star segment is occupied by Endeavour which means that it has got high market growth and market share and it is the highest ranked vehicle in the SUV segment. Question mark segment is occupied by Fiesta which means that it has got high market growth but low market share. Cash cows segment is occupied by IKON which means it has got low market growth and high market share. Dogs segment is occupied by Fusion which means it has got a low market share and low market growth and investing in it would be a cash trap.
